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Hershey outpaces S&P 500 Consumer Staples peers in July on strong Q2

The S&P 500 Consumer Staples Index recorded a gain of 2.5% in July, outperforming the overall S&P 500 Index that reported a total return of 1.4%, according to data compiled by S&P Global Market Intelligence.

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A total of 20 out of the 33 constituents of the S&P Consumer Staples Index recorded positive returns in what was a mixed July for the sector.

Hershey Co. emerged as the best-performing stock following strong second-quarter earnings that saw its total monthly return reach 13.2%, the only double-digit growth in the subindex. The chocolate-maker lifted the low end of its 2019 earnings forecast after adjusted diluted EPS in the second quarter ended June 30 jumped 15% year over year to $1.31.

Conagra Brands Inc., the maker of Hunt's tomato sauce and Slim Jim snacks, was the second-best performing S&P Consumer Staples stock. It reported a positive return of 9.7% in July, despite trimming its outlook for fiscal 2020 before the start of the month. In its earnings release, Conagra said its integration of Pinnacle Foods Inc. realized approximately $31 million of cost synergies in fiscal 2019.

U.S. cereal-maker Kellogg Co. was also among the best performers in July with a total return of 8.7% after completing the $1.3 billion sale of its cookie brands and other portions of its snacking business to Ferrero SpA. In July, Kellogg also raised its quarterly dividend by 2% to 57 cents per share.

The Procter & Gamble Co. trailed Kellogg closely with a positive return of 8.3%. The personal goods giant posted better-than-expected earnings in its fiscal fourth quarter, despite booking a noncash $8 billion charge on its Gilette shaving business. Reporting its earnings July 30, the company saw its stock rise as high as 5% during the day.

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The worst-performing member of the Consumer Staples Index was Coty Inc. The Covergirl parent suffered a negative return of 18.6% in July as it revealed a $3 billion impairment charge from its intangible assets.

Coty launched a four-year turnaround plan on July 1 to restructure its consumer beauty division and reduce fixed costs. The stock's decline in July is a reversal of Coty's rise in May, when it was the second-best performing stock among the wider S&P 500 Index.

Molson Coors Brewing Co. was the second-worst consumer staples performer in July, recording a negative return of 3.6% during the month. The brewer reported disappointing second-quarter results, which were followed by the announcement of CEO Mark Hunter's departure.

The J. M. Smucker Co. also made it to the bottom three with a negative return of 3.5% in July. The maker of Jif peanut butter and Folgers coffee raised its quarterly dividend by 4% on July 23, despite posting a 51% year-over-year drop in operating income in its fiscal fourth quarter.

Across the wider S&P 500 Index, Twitter Inc. was the best performer with a 21.2% total return in July as the social media giant posted an 18% year-over-year growth in second-quarter revenue to $841.4 million and a 14% increase in monetizable daily users to 122 million.